Vat rebate system of export in Turkey

In the 1st paragraph of 11th article no3065 Value Added Tax Law which includes provisions about export exemption, export exemption has been covered under three different clauses. The main reason of law's 11th article covering export exemption under three different titles is that functioning mechanism, discount mechanisms and rebate systems of the exemptions in those clauses have different structures. The Law's 17th article which includes provisions related with export exemption has also has a regulation similar to Law's (11/1-c) article. In that sense if we examine the three clauses located in Law's 11th article's 17th paragraph and the temporary 17th article in terms of functioning mechanism, discount and rebate topics, four situations arise. Regarding Law's (11/1-a) article VAT isn't imposed on delivery and services directly related with export. In the context of this clause, taxpayers (sellers) are able to reduce the payed/owed (being imposed) VAT caused by purchases and expenses exempted from tax in accordance with Law's 32th article and demand the amount of VAT he isn't able to reduce as refund. If the three differenct enforcements related with exemption within the scope of Law's (11/1-b) article are examined carefully, we can say that these provisions are intended for refunding taxes payed by buyers rather than imposing an "exemption" on sellers. This clause includes provisions about calculating the VAT by sellers for services and deliveries included in the clause, collecting the calculated VAT by sellers and later on in the case of sufficient conditions have met, returning the taxesagain to buyers collected from buyers. This case shows that buyers should collect the VAT after calculating it based on the transactions in subject and declare it in the frame of general principles. From this perspective, it is possible to say that Law's (11/1-b) article isn't a regulation that contains "exemption" for the sellers. Therefore, the rebate concept in this clause isn't intended for sellers but buyers and VAT rebates expressed in the clause are paid to buyers not sellers if the conditions on the Notification are met. However, implementation about "exemption related with the export of goods done by passangers" includes rebates to buyers as well as sellers having right to demand VAT rebate. Namely, at exemptions included in Law's (11/1-b) article, while VAT rebates to buyers are done by the tax offices, rebates at implementation about "exemption related with the export of goods done by passangers" are done by sellers. Interlocutor of rebates to buyers is the State. On the other hand, implementation about "exemption related with the export of goods done by passangers" states that because the VAT which State should refund to buyer is already refunded by the seller, the ones who made sales within scope of this implementation can demand the amount of VAT they paid to buyers as refund from tax offices. Because sellers doing transactions under implementations "exemptions granted to transporters not residing in Turkey together with fair, kermess, exhibition participants" and "exemption granted to foreign filmmakers" are not paying any VAT refund to buyers as it was in the case with "exemption related with the export of goods done by passangers", the sellers doing transactions under this two implementations can not demand any VAT rebate. Law's (11/1-c) article states that, seller calculates VAT when delivering the goods which will be exported but doesn't collect this tax from the exporter. Exporters, while purchasing goods to be exported without paying VAT, calculate the amount of VAT that isn't collected and report it to related tax offices. In this implementation considering the declaration at the time delivery takes place by manufacturer, two different cases arise, sometimes postponing the taxes that aren't paid but should have been paid by seller and cancelling them after export took place; as well sometimes there aren't any taxes to pay and therefore due to lack of any tax to be deferredreturning the tax that isn't deferred to buyers. When export takes place, if the tax is postponed, cancellation takes places, else it is refunded to the manufacturer. In accordence with deferment-cancellation, the above indicated implementation is a necessary implementation and if desired, in the frame ofgeneral principles, delivery of the goods in question can be also preferred. At procurement of the materials used as inputs for manufacturing final products to be exported, Law's temporary 17th article enables inward processing authorization certificate (IPAC) owners to provide inputs in question without paying VAT. Thus, materials required for production of products manufactured within scope of IPAC can be bought without paying VAT under deferment-cancellation implementation. The regulation stated in that article is based on the regulation stated in Law's (11/1-c) article in terms of implementation and in that sense is parallel to the clause in question, yet partially differs from the clause in question in terms of implementation conditions. In this study, above outlined export exemption and value added tax rebate topics derived from this exemption will be covered in the frame of Value Added Tax Law and Value Added Tax General Application Notification.